The Most Frustrating Thing You'll Read About Nielson Ratings Today

I read this over at Warming Glow, it's a post about how the minor number of Nielson households determines what everyone watches as a country. Here's the link, but I'll just copy/paste the whole article here if you don't want to click on it, because I found it incredibly disturbing. And if you look up the facts, the numbers are actually true...

"FACT: .000217 of the American Population Determines What TV Shows We Watch

Yesterday, in discussing ABC’s decision to release a spoiler-heavy 10-minute preview of the upcoming third season of “Cougar Town,” television critic Ryan McGee asked showrunner, Bill Lawrence, directly what the idea behind the strategy was. Here’s his response:

It’s not a “new standard” as far as clips go. We have a different burden – getting people back after nine months, convincing folks to try a show with a polarizing title. But: why not put every episode out? You’re not trying to get all those people to watch it on TV, you’re trying to get word of mouth, and buzz to spread to the 25,000 NIELSEN households (that’s it – has anyone met one?) that determine the fate of your show. That is our flawed system: 25,000 households representing entire TV viewing country. You just have to hope that if a Nielsen family watches pilot/clips early, they are still compelled to watch again because they liked it and want to keep show alive. Ruining it for the masses or encouraging them to watch on their computer doesn’t matter until the system changes.

I knew the Nielsen sample was small, but that number is striking: 25,000 households, out of approximately 115 million households in America. I’m not very good at math, but by my calculator’s calculations, that means that .000217 percentage of American households determine not only the amount a network can charge its advertisers, but what shows in effect are canceled or renewed. .000217. That’s astounding. That means that, essentially, a very popular show (say, a show like “Mike & Molly” that receives 10 million household viewers) has to only be seen by the right 2,100 households out of 115 million to be considered a successful show.

It also means that, around 870 Nielsen families watched “Community” each week, which is why it’s on hiatus. But the difference between a low-rated show (the 4 million households that watch “Community”) and a show that would be considered extremely safe on NBC (6 million real households, or 1,300 Nielsen households) is around 430 households.

So, basically what it boils down to is this: The decision of 430 households (out of 115 MILLION households) to not watch “Community” on Thursday nights means that the rest of us are not given the privilege of watching Alison Brie run in low-cut blouses. That’s true even if, of those 430 households, one or two of the members of that household are watching “Community” on Hulu two days after it airs, while Grampa is asleep with “CSI” on the old television set.

And that, folks, is how completely f***ing moronic Nielsen ratings are. The fate of one show can be determined by the television watching habits 430 grandfathers who fell asleep watching a crappy procedural. "

And that is why they invented HBO (and occasionally Showtime). There it gets down to the good taste and better judgement of a handful of executives who have greenlighted The Sopranos, The Wire, Deadwood, Six Feet Under, Weeds, Curb Your Enthusiasm, House of Lies and so many others that the "lowest common denominator" style of network TV would never touch.

BTW, in the science of statistics the numbers that Neilson and Arbitron are working with actually are valid. The problem is that they were far more valid twenty years ago when there were far, far fewer places for our eyeballs to visit.

And, Nick, far more ways to time-shift viewing. We watch all the NBC Thursday nigth comedies religiously... On Friday night or the weekend, from the DVR DVR and streaming video penetration has fundamentally altered TV viewing as much as the introduction of the VDR did. Unless you have reliable ways to meter that, you're not really getting anything near the whole picture of how many people watch.

You might say: "well, the sales department only care about how many eyeballs were forced to endure a live commercial play-out they can't fast-forward thru".

I have news: you only need to wait five minutes into a live program to be able to skip all the commercials anyhow.

Forget about using the broadcast flag to control IP of you prrograms: the broadcast flag is maybe the key to embedding and monitoring the viewership. Neilsen itself sells aservice that lest you embed code in your spots to make traffic much easier to track. I can easily see that expanded to the actual programming, if they don't do it already.

Neilsen, the actual man, just passed away this past year, as I recall. It may be time to let his company follow him, and find a new model from scratch that does the job better.

I'm going to skip the part where I remind you kids about Statistics 101.

Actually, no I'm not. Here's the first sentences of the Wikipedia entry on statistics. Turns out that not everything there is wrong...

In statistics, a sample is a subset of a population. Typically, the population is very large, making a census or a complete enumeration of all the values in the population impractical or impossible...[S]tatistics are calculated from the samples so that one can make inferences or extrapolations from the sample to the population.

It's not the number of houses being counted that is keeping Community on hiatus. Whether the number is 430 households or 430,000 or 430,000,000, Community is falling 30% shy of where it needs to be in order to stay safe.

Seriously, now. Without ascribing blame in any direction, do you have any doubt in your mind whatsoever that Community's audience is 30% short of the mark?

Conversely, is there anything in your actual experience of the world that suggests that 4 times more people are in fact NOT watching The Big Bang Theory? Of COURSE they are.

(That said, I made a prediction before I looked it up, that FIVE times as many people are watching TBBT, but lo and behold! I was underestimating my fellow Americans.)

Again, the problem isn't that too few Community viewers are being counted. The problem (for whatever reason) is that there are too few Community viewers. And you KNEW that. So do I.

The fact is that this argument about sampling is a straw man. Make all the jokes you want, but statistical science is actually a science. People are good at this.

Now then....

[Mark Suszko]" DVR and streaming video penetration has fundamentally altered TV....Unless you have reliable ways to meter that, you're not really getting anything near the whole picture of how many people watch."

They've been counting DVR viewing for years. It's pretty sophisticated too. For example, Live+7 has been around since 2009, and is exactly what it sounds like: the audience of the show live, plus however many people watch it in the next 7 days on their DVR.

For ad buyers, the key number is called C3 -- live viewing plus 3 days of DVR.

Another key metric is Live+SD. The fact is that the majority of DVR viewing is done the same day. Certainly is for me. (SD is technically up until 3 AM the morning after the show airs.)

And here's why this is such a key metric: for most local TV, the live-only measurement is gone. Buh-bye. Doesn't exist. It's ONLY L+SD as the near measurement, on the way out to C3. This happened in 2010, to considerable controversy.

There are a number of shows that receive huge bumps in the plus seven. Fringe gains more than SEVENTY PERCENT!!! It's safe to say that DVRs are keeping that show alive...although costs appear to be on the verge of torpedoing it anyway...but still...

The Office and Modern Family are typically up 50% in +7. House, up 60%. The good news for you, Scott, is that Two And A Half Men is up only 23%....although maybe partly because so many people watch it L+SD.

In the meantime, $60 BILLION was projected to be spent on TV advertising in 2011. It'll be a while before the actual numbers come in, but the stakes are too high for Nielsen to have the only say. Trust me, if somebody comes up with a model that gives a meaningfully different findings, then the people who pay Nielsen today will not be paying Nielsen tomorrow.

As for calculating streaming, that's the easy part, Mark. Networks don't have to rely on sampling. On the web, measuring big numbers accurately is a breeze. They know EXACTLY how many streams are being fed. They know exactly which streams are being paused, where in the show, for how long, if the stream ever reaches the end, and much more.

Of course, they rely on sampling to know how many PEOPLE each stream represents, but the "viewing household" number is rock solid.

The upside of streaming is that the network keeps a lot more of the revenue, and vendors get a lot more interesting and unskippable means of engagement....but the money is tiny.

NBC's Jeff Zuckerberg came up with a great observation that networks were trading analog dollars for digital pennies...which he amended in 2009 to say, "We're up to dimes." He added that he wasn't sure that we'll ever see dollar-for-dollar exchange, which I have to agree, seems unlikely.

Why does NBC keep popping up here? Because they've been in last place for so so long that these problems compound themselves quickly.

Seriously, do you doubt that NBC is in last place? Again, I'm not making any judgments about NBC or its shows. (Am I jinxing it to say how much I already miss Community?) I'm saying that there are a lot of smart people with a lot of money in play....and me, not all that smart and with NO money in the game, this all lines up with my gut, even if it doesn't always line up with my heart.

I'm aware that Community doesn't get as many viewers as, say, Big Bang Theory. I understand that. Much like Arrested Development, it's one of those shows that relies on strong character dynamics that have been built over several seasons, and it's hard for new viewers to jump right in. Where as Big Bang Theory is a simple concept, with simple characters, and is instantly accessible to anyone (Oh! they're all nerdy, and hey they're interacting with an attractive woman! hahahaha! [accidentally spills CostCo sized jar of mayonnaise on lap]). To be fair there have been great shows that are as easily accessible (like Seinfeld and The Cosby Show), but I'm saying Community is not.

Now, to shift this away from competition between networks, I really only want to focus on NBC. I will most certainly judge NBC and their shows. For starters, how many promos have you seen for their show Whitney? I've seen roughly four dozen. Four dozen promos for a show that gets similar ratings to Community, but has nothing but negative response from critics. Now, how many promos have you seen for Community? I think it's somewhere arouuuuuuuuuuund... ...zero...? I don't know what a Community promo looks like because I can recall ever seeing one (except maybe the commercial alerting us of the pilot). It's as if NBC has no interest in getting people excited about Community, but then put it on hiatus when it doesn't do as well as they'd like. As if they're surprised the show that has none of the advertising budget isn't well known among the masses.

But the annoying thing about this situation is that NBC seems completely oblivious to the fact that Community is a beloved show. One of the few gems that has a rabid fan base in their sea of mostly trash. Even TV Guide (and call me naive, I was unaware TV Guide was still published) did a fan poll last year and their readers voted Community as their favorite show (and made the cover)!

Doesn't NBC see any value in the fact that 1) they have a popular cult show, and 2) they have a popular cult show in it's youngest of the 18-49 demographic? Nielson ratings aside, 30% underachievement aside, don't you think it would be worthwhile to keep around a show that actually has people excited for their network? And conversely, don't you think it's *harmful* to NBC's image to take away one of the few shows that had cult appeal. I don't know how much money Community costs to produce, but based on how much money NBC spends on other crap, I can't imagine Community is getting this treatment because it costs too much.

The Nielson ratings say that The Voice is NBC's highest rated show. I don't care anything about sampling or statistics or hardcore facts right now. Whatever ratings are being produced have bad taste written all over them. And it shouldn't matter that the highest amount of mouth breathers probably do in fact watch The Voice, because NBC should have the foresight to realize what they are doing by alienating Community's strong fanbase. A fanbase (there are fan sites and internet love all over the place) that is rare for network TV, and usually saved for F/X or Comedy Central or HBO. I know they'd much rather have the most watched shows ever, but there probably wasn't much harm in leaving the "cool" show in their pocket. CBS and ABC certainly don't have such "cool" shows.

Also, in regard to that Live+7, Live+SD stuff, that was incredibly interesting, and I always wondered how that was done. DVR seems like one of the most important things to track, and I always wondered if it was getting lost in the mix. Thanks for informing us, Tim!

You don't really understand the purpose of the ratings, or the purpose of broadcast television in general. Broadcast TV is about selling products. Programs are just there to attract viewers to the commercials, and fill time between commercials.
Unless you are in the sales department, you are just getting a watered down version of the available numbers. There is a constant battle to find sales trends, and look for new audience.
The other thing to remember about national ratings, and why they don't really apply to cult shows on HBO, is that network TV is advertiser supported, as opposed to subscriber supported. You are trying to compare apples and oranges. The 'ratings' contain a lot more demographics than just raw user data. There are also tie-ins with major retailers to provide sales data and demographics. So if your show is number one in the ratings, but the demo that watches said show doesn't go out and buy the advertisers products, they shift their ad dollars to other shows whose viewers respond to your ads. Even if it isn't the highest rated show. It is much more important to have your ad seen by the demo that buys your product, than just being seen by the most viewers. This is why most adverts, and most network shows are targeted at the younger crowd. Older viewers watch much more TV than the younger viewers, but they don't spend as much money on goods and services as the younger crowd. The older viewer doesn't spend money on pop culture items, going out, entertainment, or lifestyle/image products. They are pretty much immune to the impulse buy, and mostly spend on necessities. This is why you won't see an ad for "Hot Tub Time Machine" during "The Price is Right", or why you don't see ads for "Metamucil", or life insurance during "The Big Bang Theory". This is a completely different world than Showtime, HBO etc that are all about the number of subscribers, and there is really no comparison.

Well, it's nice to think of television networks as evil corporations *only* focused on making money, and not caring about what they're putting out, so long as the dolts who watch it buy the crap slung their way... but don't you think the QUALITY of the shows they produce has anything to do how they run things? Well, actually I felt odd writing that as I wrote it, as it would explain why most quality shows get canceled, and why American Idol is on like 4 days a week.

And what of cable channels like FX that work off advertising as well? They produce almost nothing but cult, niche shows that are awesome and they do just fine for what they are. NBC is in last place (as usual), maybe they need to adopt a better business model?

[Scott Roberts]"Well, it's nice to think of television networks as evil corporations *only* focused on making money, and not caring about what they're putting out, so long as the dolts who watch it buy the crap slung their way... but don't you think the QUALITY of the shows they produce has anything to do how they run things?"

I never thought of the stations I worked for as evil, since you have the choice of voting with your eyes. You pay nothing, and you can just not watch, it's not like they are forcing you to. Look at film, or subscriber TV. You pay money, and if you don't like the product do you get your money back? Look, broadcasters are not altruists, nor are they artists. They are businessmen that have stockholders and clients. And their needs must be met first because they are paying the bills. Ad rates are based on ratings. There are only so many slots in a given day to sell, so it only makes sense to try and increase what you charge per commercial. And if you were an advertiser, you would want to make sure the demographics of the viewers that watch your ads, match your customer demographics. Reaching 100 potential customers, is better than reaching 500 people that are not potential customers. No matter how many times my grandma watches the spot for the new Snoop Dogg album, she isn't going to buy it. Fo shizzle.
I'm guessing you have never worked at a commercial broadcast station. The dynamic is much different than a film studios because the product has such a short shelf life because what they are really selling is time. When you don't sell out, and have to run a promo because there wasn't an ad sold is lost money you can never get back. If your a film studio and you have a crummy opening weekend, you can hope the numbers pick up during the run. And then you can do a foreign release, and DVD-Bluray, maybe the soundtrack generates some sales and then sell it to TV. Lots of different ways you can make your money back on the cost of a film, and balance out the cost of the losers, or pay for art films. But in TV land, the sales department is the station. The GM of the station is 99.5% of the time a person from sales. It is never a guy from production, promotion, traffic or engineering. Occasionally someone from programming. But programming is just part of sales. Programming is the horse, the sales staff are betting on to win the clients money. When they do the book break out at the end of sweeps, it's sales and programming who are at those meetings. Weekly meetings, guess who goes first and talks the most. Sales. Every other department is really just there to service sales.
It is like any business that sells something. You can't get to attached to the product. If a product doesn't sell well, you quit putting it on the shelf, and replace it with something else. Fast too. Time is money. Waiting to develop a potential audience, that may never arrive costs money they may never make back. Better to cut your losses quick and move on. With the dilution of the audience, and falling ad rates, this is only going to get worse. And if it costs too much to make, considering the return it generates, its gone unless you can find a way to make it cheaper. Sometimes they do this and the product they thought was a dud, sells well in another store. It happens. But most of the time, they get it right.
Trust me, if you are running a business, and the accountants tell you something isn't selling well, or it costs more to make, than you get for selling it, it will be gone. Doesn't matter if people like it or not. The question is does it sell, or can we afford to sell this, or do we have the viewers this advertiser is trying to reach?

This all makes sense, with sales being the driving force for everything. But my argument has been about the company's image. Don't you think it puts a tarnish on the company's brand to take away good products because they aren't selling "well enough" and replace them with crappier ones?

Ohhhhh not to get all weird here or whatnot, but let's say there's a nice little restaurant (NBC) down the street from my house, and it has an amazing gyro (Community) that is kind of hard to make and slightly expensive, but a bunch of people go in there and eat it each week and tell their friends to go in and check it out, too. The rest of the menu is pretty crappy (Friday through Wednesday), but obese slobs with no taste go in there and eat some of that stuff as well. The Peacock Diner is the worst restaurant on the street in terms of bringing people in, and in an effort to be the best, they decide to stop making the hard-to-prepare gyro, and replace it on the menu with a bologna sandwich (Are You There Chelsea?). Nobody even likes the bologna sandwich, but the diner endlessly promotes it with signs out front and local TV commercials. So now all the people who used to eat the gyro every week are upset that they've taken away possibly the only good thing to eat there. They boycott the restaurant and tell everyone not to go there because they are dumb for taking away the only good thing they had. Some people still eat there, but still not as many as the other restaurants on the street, yet The Peacock Diner has ruined their reputation as a niche restaurant and I'm forced to travel elsewhere for sustenance. And mind you, by not going in there anymore for the gyro, it also eliminates ALL possibilities of me trying any of their new items on a whim. Because I won't ever be in the restaurant!

Where to go? Well, not the greasy chain restaurant with the cheap food that most idiots love to eat at (CBS), that place sucks, and I don't get why people like it. Or the family restaurant with the poor service and annoying waiters (ABC). Definitely don't want to eat at the loud buffet that always ends up giving me diarrhea (FOX). Maybe I'll travel a couple blocks away to Cable Street and hit up that fancy Mexican joint that has those addictive burritos (FX). Or that restaurant with all the zany crap on the walls that has those awesome curly fries (Comedy Central). Or that delicious bistro with the contemporary decorations and free wi-fi (AMC). Or maybe I'll just take my lady to that really nice restaurant a couple more blocks away and get some juicy steaks (HBO). Or I can just cook for myself at home (watching 4 hours of YouTube). One thing's for sure though, the Peacock Diner isn't even on my radar anymore. I'm more than willing to drive much further out of my way to get quality food than to just go to the closest place to my house. And even if they brought back the gyro, I'd still be skeptical that they'd take it away again for months at a time. Because the manager there is an a-hole.

No, I never worked in broadcast television. But I am a guy who watches a lot of TV, and surprisingly had a good time equating television networks to restaurants. :)

[Scott Roberts]"Man... putting it that way really takes the fun out of TV... :("

I think a lot of that is because there is confusion about who the customer actually is.
Most TV viewers assume they are the customer. They are not.
The advertisers are the commercial broadcasters customer. It is a much different dynamic from subscription TV and film. Once you understand that, it all makes sense.

The other thing to think about is all the places they loose money besides the normal costs of doing business. Missing a single commercial due to a tech or scheduling reason in prime time can cost thousands of dollars. Lets not forget about preemption, especially in prime time. You'll miss quite a few spots, ouch! Sometimes you have proof of performance issues on spots that you sell, when the show they air in doesn't do the number (ratings) you promised. So then you either have to hand out refunds, or make-goods to the clients. And then there are programs that stations buy, that don't do well. Lets say you put a one year contact on some strip syndicated show, that killed in the ratings on its first run. And after one month the overnights (ratings) say it's a dud, and what you ran in the same slot before was much better. So you move the new show to the late overnights just to use up the contract, or just don't run it and put the old show back on. Now your paying for two shows. One show that you don't run, or are running on the overnight, plus the replacement, for the replacement. Sometimes these shows have self contained barter spots to help pay some of the tab. These will often have to still be run, in the original time slot, whether you air the show or not. This happens all the time.

And there are plenty of things in broadcasting that still costs huge dollars, despite the advance of cheaper/smaller production gear. Transmitter need a new tube? 10k-75k. Heck it used to cost us 600 dollars just to have a guy come out and climb the tower to change a dead obstruction light. FCC fine, 10k. How much electricity does it take to light up the studio 3 times a day, plus the air conditioning load, the transmitter, the offices...

Solid, sound arguments here Scott. Yes TV is a business and especially yes that the GM didn't get to be GM because he was a really smart Chief Engineer. He went from salesman to Sales Manager to General Sales Manager to General Manager.

[Scott Sheriff]"Older viewers watch much more TV than the younger viewers, but they don't spend as much money on goods and services as the younger crowd."

But there's a little more to why media buyers value 18-34's and, 18-49's so much more than the 50+ crowd. The logic as explained to me is more about brand loyalty and one's willingness to be influenced into switching from one brand to another. Even though people 50+ typically have more disposable income, they are considered more likely to stick with what they know, hence less influenced by advertising. "No reason to try Miller when I've been a Budweiser drinker of the past 30 years." A 20-something year old on the other hand may try every beer that catches his attention with a funny spot.

Extend this logic to the female consumer and it becomes an even stronger argument. Young women are setting up households from scratch and exploring what products they and their family will consume. Older women know what they think works, what they like and what their family members expect. "Why would I buy Jiff when I know that my family likes Skippy Peanut Butter?"

Sorry that Scott R. feels like he's unfairly being cheated out of Community. But advertising, and by extension commercial television, is in the business of selling stuff. They may use humor, drama, aesthetics, whatever to do so but when it comes down what sells that's really all that matters.

[Mark Suszko]"Tim, the fact that this explanation "explains" /"justifies" why Pro Wrestling is on the Sci Fi channel, only proves how warped the system is."

Only a month late responding, but still...

SyFy has long been pushing the limits of demography and branded programming. I've done a couple of long posts on the integration of product placement with advertising that looks like product pitches being done by the characters on the show. Very clever, very tongue in cheek, and quite effective. Chuck wound up doing something similar with Subway, whose investment was part of the reason why Chuck stayed around as long as it did.

It's worth noting though that most TV execs like TV. They're not especially cynical. The execs who greenlit 30 Rock and Parks & Rec probably have the same mixed feelings you do about some other shows on the network. They're also not as timid as they sometimes get accused of being. The Voice was anything but a sure thing.

Cult shows also sometimes stay around as long as they do because somebody up there likes them. I'd put Community in that category. You might say that NBC could or should do more...and I agree...but it's on longer than it might otherwise have been without somebody's internal support. Ditto Fringe, imo -- and for the record, one of my very favorite shows EVER.

But ultimately, Scott is right. Customers don't pay the bills. Advertisers do. They're buying responsive eyeballs. (Not just eyeballs -- the RIGHT eyeballs, which is why advertisers advertise on wrestling on Syfy. They're reaching the people who provide ROI.)

This is true at the COW too. We provide the best COW we possibly can, and are looking for ways to improve it for YOU...but our customers are the ones whose banners you see here. I forget who, but I heard someone say that, if you're not paying, you're the product.

We're certainly not cynical about this. The COW was founded by professional media producers who needed peer-to-peer support for their media production companies. Those are still the people in charge.

But if our "ratings" weren't going up -- and they are-- we'd have to figure how to address it. I can promise it wouldn't be with wrestling. :-)

I think every tutorial on the COW should have a Subway sandwich in it.

Today we are going to learn how to add a drop shadow to this Fresh, delicious meatball sandwich on freshly baked bread drenched in mangialicious marinara sauce.

PS, I thought the Subway product placement on Chuck was great. They turned it into a funny joke so it felt like it belonged on the show. Unlike those Soap Opera product placements someone posted here a while ago. Those you laughed at the product placement.